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E.ON bolsters finances with €1.35bn capital raising

German utility E.ON raised €1.35bn ($1.45bn) of new capital via a share issue, bolstering its finances ahead of big payments to the German government over the country’s nuclear legacy – and days after posting a record €16bn loss.

E.ON – which is transforming to a new business model based on renewables and networks – increased its capital after issuing more than two million shares sold by means of an accelerated bookbuilding process.

E.ON has to make a one-time payment of around €2bn for the agreement with the German federal government on the funding of the country’s phase-out of nuclear energy, followed by a payment in mid-2017 into a state-run nuclear energy fund of about €10bn. In return, the German federal government will assume responsibility for the intermediate and final storage of nuclear waste.

“In view of the impact by the payment of the risk surcharge to Germany's state-run nuclear fund in mid-2017, the purpose of the capital increase is to strengthen the equity and liquidity basis of E.ON,” said the group.

As part of the transaction, E.ON agreed to a six months lock-up period with respect to any transaction related to its shares, including offering its shares to its shareholders in the context of a scrip dividend.

“At our annual press conference we announced that we will quickly implement measures to finance the risk premium. Just one day later we completed a capital increase successfully,” said E.ON finance chief, Marc Spieker.

“This transaction is the first step towards the implementation of our €7bn package, with which we will swiftly and decisively reduce our debt to around €20bn.”

E.ON had a record €16bn net loss last year, compared to net loss of €6.38bn in 2015, due to costs related to the spin-off of fossil generation unit Uniper.

The company, however, stressed that its core operating business remains robust and is set for a bright future focused on renewables.

E.ON kept a 47% minority share in Uniper, which since January 2016 has been operating as a separate legal entity.

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E.ON bolsters finances with €1.35bn capital raising

German utility E.ON raised €1.35bn ($1.45bn) of new capital via a share issue, bolstering its finances ahead of big payments to the German government over the country’s nuclear legacy – and days after posting a record €16bn loss.

E.ON – which is transforming to a new business model based on renewables and networks – increased its capital after issuing more than two million shares sold by means of an accelerated bookbuilding process.

E.ON has to make a one-time payment of around €2bn for the agreement with the German federal government on the funding of the country’s phase-out of nuclear energy, followed by a payment in mid-2017 into a state-run nuclear energy fund of about €10bn. In return, the German federal government will assume responsibility for the intermediate and final storage of nuclear waste.

“In view of the impact by the payment of the risk surcharge to Germany's state-run nuclear fund in mid-2017, the purpose of the capital increase is to strengthen the equity and liquidity basis of E.ON,” said the group.

As part of the transaction, E.ON agreed to a six months lock-up period with respect to any transaction related to its shares, including offering its shares to its shareholders in the context of a scrip dividend.

“At our annual press conference we announced that we will quickly implement measures to finance the risk premium. Just one day later we completed a capital increase successfully,” said E.ON finance chief, Marc Spieker.

“This transaction is the first step towards the implementation of our €7bn package, with which we will swiftly and decisively reduce our debt to around €20bn.”

E.ON had a record €16bn net loss last year, compared to net loss of €6.38bn in 2015, due to costs related to the spin-off of fossil generation unit Uniper.

The company, however, stressed that its core operating business remains robust and is set for a bright future focused on renewables.

E.ON kept a 47% minority share in Uniper, which since January 2016 has been operating as a separate legal entity.